Supply Chain – The Biggest Asset In Modern Day Retail?

supply chain and logistics

 

Introduction

The theoretical world of how retailers entice consumers to buy is all good and well but if service delivery doesn`t live up to expectations then the service experience falls short.

Supply chain is an essential cog within any retail strategy and one that should not be under estimated. Continued investment is essential to facilitating continued sales growth. The retail sector is seeing a continued migration to outsourcing of physical operations to third party warehousing and logistics specialists. The modern day complexity of supply chain demand requires industry expertise and this is where partnering with third party warehousing and logistics specialists can really add value and provide a competitive edge.

Outsourced supply chains have historically involved the use of numerous partners across the sphere of international freight management, warehousing and road haulage. Nowadays there is an emergence of third party supply chain companies that provide a full end to end solution under the one roof.

From demand planning and factory gate collection through to order fulfilment and customer services. These types of businesses are commonly referred to as a total supply chain provider.

Just like retailers have to move with the times, so do logistic companies. Modern day demands on a supply chain partner can be really diverse and are barely recognisable from 10 years ago. The kind of support a third party operator is ale to provide these days can include:

Freight Imports & ExportsReturns ManagementAmazon Preparation
Customs ClearanceProduct RefurbishmentStock Clearance
Inland HaulageSame Day DeliveriesConsultancy
Quality ControlOrder FulfilmentCustomer Services
Pre-retailDrop ShippingContact Centre
Demand PlanningVendor ComplianceWeb Photography

 

The Top Logistics Trends to Look Out For in 2016

1. A continued increase in retailers opting to outsource their supply chain to third party logistics operators.

Retailers can be forgiven for leaning towards the more exciting end of the customer experience however the battle ground for retail prominence and improved  is more likely to sway towards the opportunities that exist within supply chain.

Contrary to popular opinion, outsourcing to the right third party logistics provider helps to increase control as opposed to dilute control. The partnership involves a jointly scoped solution and is underpinned by a number pre agreed metrics, pre agreed pricing and contractual commitment.

In retail logistics can often be seen as non-core activity. Outsourcing all non-core activities allows the retailer to focus on manufacturing and also the virtual side of retail whilst the logistic expert takes on the physical challenge.

2. A purge on returns management and assistance in turning graded stock or end of season stock into cash.

A concerted effort to both reduce returns and to face into legacy stock can often be the difference between profit & loss for lots of retailers. Warehouses are expensive and simply do not have the luxury of holding graded or legacy stock without a clear decision path that facilitates a swift turnaround.

Non-moving stock is problematic to everyone in supply chain and the more agile logistics providers are alive to this problem. Modern day logistics businesses have various solutions to hand to help curb the returns cycle and to handle inventory on site. To increase the chance of right first time delivery most carriers now provide predictive text and this helps to keep failed deliveries to a minimum. From a warehousing perspective agile providers will now offer value added services such as product refurbishment, movement analysis for slow moving stock supported by online and offline stock clearance options

 3. A continued increase in cross border trading and logistics reach.

As the emerging nations of Asia, Indonesia and South America enjoy their new found wealth there is an insatiable demand for Western goods and this opportunity is simply too big to ignore. This in turn will drive the need for logistics providers to have a global reach either directly or in-directly through a network of strategic partners.

4. An upsurge in demand for “value added” services

With speed and convenience being at the forefront of buyer decision making, more and more retailers will opt to migrate a range of services to the logistics provider handling their warehousing and distribution.

  • From an inbound call centre perspective the communication triangle of ABC will revert to A-B and information acted upon at source.
  • From a web photography perspective samples can be taken directly off the container shipment and digital photography undertaken on site.
  • From a returns perspective – all returns will go to the operator for initial quality control and subsequent refurbishment where valid.
  • From an online perspective – agile logistics providers will have a degree of digital competence and able to provide a degree of in house digital support. This would often incorporate listing support and assist with stock clearance via the online marketplaces of ebay & Amazon or via offline traders.

5. An increase in B2B ecommerce

B2B sales has largely steered clear of the ecommerce revolution but can no longer afford to turn the other cheek. After all, everyone welcomes speed and convenience. 2016 will see more and more wholesalers see their paper based catalogues complemented with a digital offering. This inevitably with see a shift in trade businesses looking to pair up with a logistics provider that is both systems savvy and can fulfil trade orders or offer a drop shipping solution.

6. The continued rise of the drop shipping model.

Instead of purchasing a large amount of inventory, you simply partner with a drop shipping supplier and list their merchandise for sale. Let`s face it – no one likes holding inventory hence the leaner the better.

Most wholesalers are only equipped to handle bulk and their systems are largely antiquated. As a result they will outsource this aspect and send replenishment stock into a 3PL who in turn will fulfil single item orders direct to consumer in a just in time manner. The use of a reputable 3PL provider can also help to open doors as a vendor with some of the well-known blue chip retailers i.e. Such as Argos.

7. An upsurge in overseas businesses seeking UK & European logistics solutions.

In the same manner that there is a major push to export Western goods to the rest of the world, the same applies in the opposite direction. The UK & European consumers are highly desirable to overseas businesses with the only real obstacle being lead time on shipping. To solve that problem the overseas businesses will continue to seek out logistics partners that can serve both the UK & European mainland in a timely and cost effective manner and from one central despatch point.

China, Australia and the USA are the most active countries pursuing such a solution at this point.

Author: Ian Walker – Managing Director 3P Logistics Limited
Published: 13/01/2016
Visit us: www.3p-logistics.co.uk
Email Us: enquiries@3p-logistics.co.uk
Call Us: 01942 720077

Introducing 3P Logistics Limited

Formed in 2006, multi-award winning 3P Logistics are now firmly established as one of the market leaders in 3PL supply chain management for both SME’s and Blue Chip clientele.

Operating from multiple sites in the UK and with access to over 150,000 square feet of accredited warehousing we provide the complete range of outsourced warehousing and logistics services for a host of B2B and B2C companies.

From freight forwarding and general warehousing through to e Commerce order fulfilment, and delivery we have every aspect of your supply chain covered. If you’re a fast growing business that seeks high quality third party warehousing and logistics services at an affordable price then we could be a good fit for your business.

In addition to a great team of people, our web based management systems and ISO accredited processes makes us the logistics partner of choice for a wide range of National and International businesses.

Using our global reach and International know-how we take great satisfaction in helping our clients to expand overseas and exploit the opportunities for cross border trading. Our collective buying power and industry expertise can also help to improve your bottom line and enhance the service experience.

If business growth and leaner operations are important to you then why not join the growing number of businesses opting to outsource their operations to 3P Logistics.

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